There is an article in the news that talks about ethanol's effect on fuel mileage.
Because ethanol does not combust as hot as gasoline, it takes more ethanol to create the same amount of energy, according to Earl Baker, AAA Auto Repair. “You can get anywhere from one to four miles less per gallon with an ethanol blended fuel.”
While it is true that ethanol contains less energy than gasoline, to lose 4 miles per gallon the vehicle would have to be getting over 100 miles per gallon on pure gasoline.
According to a NorthWest Cable News analysis, a car that averages 30 miles per gallon would spend $11.66 on a 100 mile trip if gas costs $3.50 a gallon. The same trip using the ethanol, or E10 blend, could cost up to $13.46. Over an average driving year, about 12,000 miles, a motorist could pay up to $215 more for using E10 gasoline when compared to regular fuel.
From checking the math, the comparison is against a vehicle getting 26 miles per gallon on E10, suggesting a loss of over 13% in fuel efficiency. Like I said, ethanol contains less energy than gasoline, but for a 10% blend of ethanol to cause a 13% loss in fuel mileage, ethanol would have to have negative energy. And I am pretty sure that outside of the realm of Star Trek that isn't possible.
I think that it is safe to say that the American Petroleum Institute (API) is no fan of ethanol and that when they publish material relating to ethanol you can normally expect it to be the most negative information available. In their ethanol backgrounder here is what they have to say about ethanol's fuel economy.
Fuel Economy: The heating value of neat ethanol is two thirds of that for typical gasoline. For gasoline blends containing 10% by volume ethanol, the heating value is about 3.4 percent lower than for a typical gasoline. (1) This difference in heat content is reflected in a small loss in fuel economy performance for vehicles operated on gasoline-ethanol blends. Based on measurements made by the Auto/Oil Air Quality Improvement Research Program, the fuel economy loss for a fleet of model year 1989 vehicles operated on gasoline containing 10% by volume ethanol was 2.6% (33). Recent data published by the Coordinating Research Council on a fleet of 12 California-certified model year 2001-2003 cars and light trucks suggests that the fuel economy penalty for 10% by volume ethanol blend is on the order 1.4%. (27)
So, if we use the number the API suggests of a 2.6% loss that would mean that a vehicle that would normally get 30 miles per gallon with gasoline would get about 29.25 miles per gallon with E10. A loss of about .75 miles per gallon.
Factor in the savings from using ethanol blended fuels and the cost per mile should be about the same for both fuels.